When times are tough, Invest in infrastructure...

or at least encourage it.

That is what the Mexican government is doing. Some projects are garnering a fair share of interest, at least in the press.

A high profile infrastructure project of note is the Riviera Maya International airport, announced formally last week my Mexican President Felipe Calderon, in Tulum, south of Cancun and Playa del Carmen on Mexico's Caribbean Coast.

The Rivera Maya Airport, which would have the capacity of up to 3 million passengers a year, has been promoted by the state of Quintana Roo for years, using its territorial reserves as trade out to the Ejidos (private land owned by co-operatives of Mexican citizens) to assemble the site, and using spin and good times to make the operations package look like a great deal. It remains to be seen if the demand equation really makes for an attractive project from an investors perspective. Already some experts are claiming that there may be few takers for the Development and Operations package. However, ASUR which operates Cancun, Cozumel, and Merida airports should be expected to submit a an aggressive bid, since they are likely evaluating the future airport as better a loss leader than direct competition.

The publicity which has been going on for several years now regarding the Riviera Maya Airport has stimulated an interesting degree of land speculation around the proposed airport site. Most interestingly is that the proposed site is surrounded by low density forest preserve, some private but with very little land available for any other use but low density, low impact residential.

A myriad of small "subdivisions" have sprung up along the road to Coba from Tulum; destined to be the main thorough fare to the new Airport.

The proposed airport will about 2 hours south of Cancun International Airport and could create some interesting dynamics for Cancun and Playa del Carmen.

The tourism growth trend for the last decade has been South-bound which allowed the blooming of Playa del Carmen, and increasing interest in Tulum. Now with the government promoting Mahahual and the Costa Maya still further south; a new airport puts more developable land within the 1-2 hour ground transport distances that many developers, investors and flags look for as key criteria for successful tourism development.

The Riviera Maya International Airport would also allow (or force) Cancun International Airport, the 2nd busiest in Mexico and newly expanded to double its flight capacity of 1 year ago, to be an international hub. The Riviera Maya International  Airport may stimulate the city of Cancun to focus more on conventions or even medical tourism promoting its low costs, access, growing medical infrastructure and amenities. Casinos have been mentioned in the past for Cancun, which some say fit nicely with the new urban high density and high rise skyline; however there is social pushback on the casino issue due to concern of the impact on the local population and community.

The airport would place Playa del Carmen, in recent years the envy of tourist destinations the world over, within 45 minutes of 2 international airports. Playa del Carmen's municipality -Solidaridad - is in fact discussing ways to attract alternatives to traditional "beach tourism" investment, in conjunction with the local AMPI Riviera Maya Real Estate association. Heavily influencing future growth will be the construction of a major new road from Playa del Carmen, towards the North West shortening time to Chichen Itza and Merida, Yucatan, and providing a much needed major urban artery other than the Federal Highway which runs parallel to the Caribbean Coast line.

The point is that infrastructure goes a long way in creating synergy and bringing collateral real estate investment. Historically the Mexican government has done a good job promoting the promise of its infrastructure projects to the capital markets. In an era of repositioning and restructuring, infrastructure lays out the map for the appropriate real estate investment required for continued growth. In these dynamic and uncertain economic times, it is good to have a map.